Why Andhra is epicentre of the biggest scam

For the last five years, India’s central government has been run by the states. More or less. We have a central government only in name; it is neither central to us nor does it govern. It is run by a cabal of state-level strongmen for defending their narrow political bases, not for the benefit of the nation as a whole.

Many key economic ministries are run by people with state-level interests in mind. Thus, we have a Lalu Prasad running the railways to impress voters in Bihar; we have a telecom ministry that is run from Chennai. This is not only because there are regional parties running central ministries. Even the core constituent of the UPA, the Congress, nominally a national party, has been reduced to a regional power, thanks to the weight of MPs from one single state — Andhra Pradesh.
Till recently, Andhra was the only big state the Congress ran on its own - without a coalition partner. If the Congress had not been dynastic, YS Rajasekhar Reddy might well have been PM of a patchwork coalition.

If you don’t think so, ask yourself: why has the biggest corporate scandal of the UPA government surfaced in Andhra Pradesh (Satyam) and not somewhere else? Why have some of the biggest contracts of the central government gone to Andhra companies? Examples: the Mumbai and Delhi airports (despite the power of the Ambanis), the Bangalore metro, the countrywide shower of projects on Maytas, the Satyam promoters’ real estate and infrastructure fief.

Scandals always erupt close to the centre of power, and in the Congress the effective state power is the Andhra CM.

And that’s probably why you can assume that the Satyam scam will be safely buried as long as Reddy rules Andhra. Not only is he busy transferring the blame for the scam to his predecessor Chandrababu Naidu, the Andhra CID is treating Ramalinga Raju as personal property, with Sebi and other investigators being held at bay for more than 20 days after the scam broke cover.

Do we need any further proof that it is the states running the centre? National interest is clearly being sacrificed for serving petty political ends. The only two national figures in the Union cabinet — Manmohan Singh and P Chidambaram — have been reduced to ciphers. Both reforms and governance have gone for a toss.

If we have to end this charade, sooner or later we have to build a truly federal India. We are currently a union of states rather than a real federation, and this is simply unworkable. While political power has devolved to the states, economic power is at the centre. To send state politicians back to the states and keep central politics central, economic power has to be substantially devolved. There is no alternative to serious constitutional amendments for the same.

Three changes are critical. First, we need to invert the economic pyramid by making states the primary entities of taxation and economic policy. All taxation, barring customs, should be state-led, and the finance commissions should decide what share of state revenues should go to the centre and not the other way around. The centre should control defence, currency and monetary affairs, communications, citizenship and national assets (highways, waterways, etc). The states would thus run their own economies, much like the countries of the European Union.

If this is done, state level leaders should be happy running states rather than using central ministries to run local agendas. And any state-level scam will not have national ramifications.

Secondly, we need to shift to a presidential form of government like the US. In India’s fractious polity, the Westminister model of collective cabinet responsibility leads to irresponsibility and poor governance. We need an executive president, directly elected by the people, and executive governors running states. A constitutional amendment defining the powers of executive heads and legislatures is thus vital. All this works in the US and elsewhere. So why not in India?
Third, articles 356 and 370 can be safely abolished. Article 356 enables the centre to sack state governments, and has led to much abuse. Today, with state bosses running the show at the centre, article 356 is practically impossible to use or misuse.

A better option would be to create a new law which levels the field: a two-thirds majority in the centre should be able to dismiss state governments that are not acting constitutionally. Conversely, if more than half the state legislatures vote to dismiss the centre, they should be enabled to do so and call for elections.

As for article 370, which is meant to protect Kashmir’s autonomy, it would become irrelevant since the changes would enhance the state’s powers beyond article 370. All states will have azaadi, not just Kashmir.

We need a new constitutional consensus to renew and revitalise our country.  We could call it a big IF — the Indian Federation.